Germany entered World War II with a navy ill equipped for waging war against a major naval power. The head of the German navy, Grand Admiral Erich Raeder, supported by Adolf Hitler, had planned to build a powerful surface fleet of capital ships to challenge Britain and the United States for world naval mastery. War came too early for this "Z Plan," however.

When the war began in September 1939, Raeder recognized that his navy was inadequate for the task ahead, stating that it "would be able to do little more than show that it could die courageously." Lacking the ability to challenge the British and French in a general engagement, the German navy fell back on the experience of World War I as Raeder sought to wage a war to destroy British commerce. He recognized that surface raiders patrolling the oceans and sinking ships in an irregular manner could in no way serve as a distant blockade of Great Britain. Instead, he hoped that they would force the dispersion of Allied naval forces from more important theaters and wear down a large part of the Allied naval strength through the need to escort convoys and form task groups to hunt down elusive raiders.

Raeder had sent the pocket battleships Deutschland and Admiral Graf Spee to sea in mid-August 1939. However, valuable time was lost, as Hitler's reluctance to make the first hostile move against Britain meant that the ships were not authorized to begin operations until 26 September. The two German capital ships initially met Raeder's expectations, sinking numerous merchant ships and by October forcing the Allies to employ a force of 3 carriers, 3 battleships, and 15 cruisers in task groups to hunt for—or to provide strengthened convoy escorts against—these two German ships. The threat did not last long, however, because Germany's strategic position prior to June 1940 precluded easy transit and resupply of the ships. In November 1939, the Deutschland returned to Germany, and the Graf Spee met its demise in the Río de la Plata in South America in December 1939.

The loss of the scuttled Graf Spee, major surface ship losses suffered in the April 1940 Norway Campaign, and the sinking of battleship Bismarck in May 1941 all led Hitler to place restrictions on the use of his capital ships, so that by 1943, they rarely ventured to sea.

Beginning in 1940, the Germans relied on another type of ship, the armed merchant cruiser (AMC), for commerce raiding. They eventually fielded nine AMCs, known in German as Hilfskreuzers. Made to look innocuous, the AMCs were capable of rapidly changing their profile to confuse prey and hunter alike; in essence, they were stealth ships. Freighters best served this purpose, as they possessed the holds needed to store supplies for long cruises and could mount 6 x 150-cm guns.

From 1940 through early 1943, a total of nine armed merchant raiders operated at sea, mainly in distant waters where many unescorted merchant vessels belonging to the Allies were still to be found. The German AMCs initially proved elusive, and by the end of 1940, they had sunk 54 Allied vessels totaling 366,644 tons; they also forced the British to devote a larger portion of their naval assets to the effort to hunt them down. However, as the war dragged on, Allied intercepts of German radio communications led to the sinking of four of the AMCs as well as some of their supply ships. The other five AMCs reached German-controlled ports but could not slip back out through the Allied blockade.

The German AMCs sank 846,321 tons of shipping, a major return for what was, after all, a relatively minor investment. This figure represented 7.5 percent of all the tonnage sunk by Germany in the war. The impact of the AMCs cannot be quantified by this statistic alone, however. These nine ships also disrupted shipping timetables, forced longer voyages, and delayed the arrival of desperately needed Allied war matériel. The capture of the British cargo ship Automoden by the AMC Atlantis, with the seizure of important British government papers, dealt a serious blow to Britain's position in the Far East.

A voyage that might normally have taken only two weeks may have extended into months because of a raider's activities. Beyond that, the secondary and tertiary effects, combined with the efforts to eliminate the AMCs, produced results well out of proportion to the time, money, and manpower that Germany put into the program. However, as in World War I, the German navy could not take advantage of their impact, and by the spring of 1943, no more AMCs were at sea.